The worldwide spread of geopolitical risk frustrates global trade. From this perspective, the Russia-Ukraine conflict has changed the worldwide business landscape. However, this conflict has urged an influential bloc, BRICS, to realign their trade strategies. Amid this situation, we investigated the response of the historical bilateral trade scenarios of the BRICS countries to the disaggregated geopolitical risk phenomena, including geopolitical risk ‘threats’
and geopolitical risk ‘acts’ covering monthly data over the period 2000-2022.
Utilizing the cross-quantilogram econometric technique, we found the mixed response of the bilateral trade between BRICS countries to the geopolitical risk ‘threats’ and ‘acts’. Overall, these findings illustrate the detrimental consequences on bilateral trade of these economies confront, carrying significant policy implications.
Every country faces the detrimental consequences of geopolitical risk events, hampering trade flows. The state themselves induces some risks, and some are from external forces emanating from nuclear, terror and military activities. In this regard, affected states, especially the BRICS countries, should have prudent remedial measures to reduce their self-created geopolitical risks to increase their firm-level business operations for promoting exports of the goods. Concerning outsiders-yielded geopolitical risks, these economies should have joint economic and political courses of action to tackle the geopolitical
risks for continuing trade flows. More importantly, BRICS countries should withdraw any restrictive trade policies within this block. Therefore, these economies must care about their alliance-laden interests relating to their trade flows. Moreover, this bloc’s joint agenda of tackling geopolitical risks can help develop mutual understanding and spur the trade volumes among these nations and the global arena.
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